FIRS Clarifies 4% Development Levy as Consolidation Under New Law to Strengthen Nigeria's Investment Climate

The Federal Inland Revenue Service (FIRS) in Nigeria has clarified that the 4% Development Levy on imported goods is a consolidation under a new law, not an additional burden on businesses. The move is designed to simplify compliance, reduce unpredictability, and strengthen Nigeria's investment climate.

The new levy is part of a major tax reform introduced to enhance economic competitiveness and protect incentives for long-term fiscal stability. FIRS emphasized the need for Nigeria to align with global tax agreements endorsed by 140 countries, warning of revenue loss if the 15% minimum effective tax rate for large domestic and multinational companies is not implemented.

The reform also introduces a modern approach to taxing capital gains and aims to close loopholes that previously allowed for profit shifting.